Mayor Rahm Emanuel has described his Infrastructure Trust as a revolutionary change that will allow private investors to pump $1.7 billion into “transformative” infrastructure projects the city could not afford to build on its own.
On Wednesday, the “revolution” finally got under way—but in a much smaller way than first envisioned.
Nearly two years after Emanuel proposed the trust and rammed it through the City Council, aldermen approved the first project: without fanfare and almost no debate.
Known as “Retrofit One,” the project calls for $13 million worth of energy improvements to 60 government buildings with a combined 4.9 million square feet of space. They include 22 libraries, 15 police stations, the police and fire academies, City Hall, the Cultural Center and the 311 and 911 centers.
Emanuel didn’t even put out a press release on the City Council vote. That’s how quiet he’s become about a project launched with great fanfare, only to take nearly two years to get off the ground.
After Wednesday’s vote, the mayor was unapologetic about the slow launch.
“If we weren’t doing the work, there wouldn’t be 200 people going to work. There would be zero. If we weren’t doing the work, there would be more heating costs and electricity costs….that would literally be going out the window,” he said.
“Two hundred people are going to go to work making sure that buildings in the public sector are energy-efficient and we’re not wasting energy. This was a way to do it that didn’t tax the taxpayers, but actually found a creative way to finance.”
Chief Financial Officer Lois Scott has estimated that the projects will reduce the city’s annual energy bill by $1.4 million and that those savings will be used to pay back project costs.
“The city will pay [the trust] the energy savings generated from those improvements until the cost of making those improvements has been full reimbursed,” Scott told aldermen earlier this week.
“If there are no savings, the city does not pay the trust anything….Unlike a bond issue, the agreement does not require a city guarantee or reserve fund. City taxpayers are not on the hook if the projects do not perform as expected.”
Brushing aside bitter memories of the parking meter deal and fears of user fees to guarantee investment returns, the City Council agreed in the spring of 2012 to tap private investment for public infrastructure projects.
The 41-to-7 vote came after the mayor’s forces buried a pair of alternative ordinances that would have required City Council approval of all trust-funded projects and empowered Inspector General Joe Ferguson to investigate the trust, among other safeguards.
The money was expected to come from five financing giants, the largest chunk from the Spanish-Australian consortium that paid $1.83 billion to lease the Chicago Skyway for 99 years in exchange for pocketing tolls and continuing to raise them.
At the time, City Hall promised to launch the trust with $200 million in energy efficiency projects for government buildings — including converting water pumping stations from steam power to electricity — that were expected to generate a 20 percent energy savings that will be used to repay investors.
Emanuel has repeatedly refused to discuss what other projects the city wants to finance or what user fees would have to be imposed to make certain investors get their money back with interest.